Arresting stuff from Alan Ruskin of RBS, who has just pinged out an “Alpha Alert”:

Pure panic. It is rare to see a day where the news flow fits so poorly with the decimation in the risk trade, from currencies to high yield to the once sweet and innocent money market. If this is a sovereign crisis (and this is surely still the core of the nervousness), the sovereign bond markets are doing very well thank you. All the major global fixed income markets are up, and even the epicenter of the crisis, Greece is hanging in, albeit no doubt with a little help from their new found Central Banker friends. The disjuncture between CDS (where the periphery CDS is up sharply) and bond spreads, show how European official intervention (in both markets) have reduced visibility, which no doubt is also part of the problem. Across an array of asset classes, I hear from traders a simple refrain – investors want to get close to base. That gold has gone down today is a telling comment on how much this has been a story of investors liquidating even winning trades. In the currency world, we have become used to thinking about yen carry trades blowing up, but this feels like the first clean blow-up of the EUR carry trade. Read more